No financial terms were disclosed. Once the deal is concluded, which is expected to happen in early 2013, about 1,900 NSN staff, most of whom are based in China, Germany and Portugal, will transfer to Marlin. The private equity firm is creating a new optical systems company, based in Munich, with NSN's current head of optical, Herbert Merz, as the CEO.

Marlin intends to form a new optical equipment company around the new acquisition and buy more assets: It says it "intends to act as a consolidator, building an industry leader in the fragmented optical networking sector."

Why this matters
This is a significant move for NSN, which had not identified its optical business as "non-core" when it unveiled its new strategy a year ago. In fact, NSN pinned its future on a broad mobile broadband-focused market strategy, dubbed Liquid Net, that included Liquid Transport as a key element. (See NSN Hangs Its Future on the Liquid Net.)

But NSN is still a company struggling for financial stability and this deal should bring in some cash and, perhaps more importantly, reduce its operating cost base beyond its initial targets, as the 1,900 staff that will come off its payroll are in addition to the 17,000 jobs NSN is shedding as part of its restructuring process.

That cost-cutting process is already having an impact on NSN's profitability, so the vendor's parents, Nokia Corp. (NYSE: NOK) and Siemens AG (NYSE: SI; Frankfurt: SIE), will likely see this asset sale as a positive. (See APAC Boosts NSN's Q3.)

An NSN spokesman tells Light Reading that "transport is important" but that the company could now narrow its technology focus on the radio access network (RAN), mobile core and customer experience management (CEM). Once the divestment is complete, NSN will "work with best-of-breed partners" and integrate third-party technology with its remaining mobile broadband products using its Service Provider Information Technology (SPIT) tools (NetAct and configuration software) in the same way it already does with routers and microwave backhaul systems.

Marlin Equity must have a cunning plan up its sleeve.... or maybe it doesn't mind the thin margins that optical attracts these days.

Depending on what sort of cash NSN is getting -- remember, it gave Adtran money to take the fixed broadband business off it shands -- this looks like quite a smatr move, allowing it to be even more focused and reducing its opex further.

From Tom's blog, operator revenue is not merely 'capped'. I see it decreasing in the coming years. There's only so much you can do to reduce network cost (though other aspects of 'costs' like customer acquisition costs, e.g. subsidies have yet to be really looked at). You need new avenues of top-line growth, as Tom alluded (OTT).

I remain skeptical. In another article, Ray commented and asked if Virgin's WiFi networks would help operators with the mobile data issue. In the UK (and Europe), people tend to be indoors and play with their smartphones, consuming bandwidth indoors (on WiFi). Does this not actually shift revenue away from mobile? I've not heard a compelling plan from any operator, on how they intend to grow revenue.

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